KUALA LUMPUR (Aug 9): Dagang NeXchange Bhd's (DNeX) subsidiary PING Petroleum UK Ltd (PING UK) is acquiring the remaining 50% stake in the UK offshore Avalon Oilfield from Sumitomo Corp's wholly-owned subsidiary Summit Exploration and Production Ltd for US$17 million (about RM71.72 million) under a deal said to stem from the seller’s intention to shift away from the fossil fuel business and the buyer’s decision to avoid any potential conflicts which may arise should the 50% stake be sold to a third party.

DNeX said in a Bursa Malaysia filing today that the Avalon Oilfield, which was initially discovered in May 2014 and further appraised in July 2017, lies entirely in the UK block 21/6b of the North Sea at 120km northeast of Aberdeen.

According to DNeX today, PING UK had on Friday (Aug 6) "entered into a sale and purchase agreement with Summit Exploration and Production to acquire the remaining 50% interest in the development of Avalon Oilfield not owned by PING UK for an initial cash consideration of US$5 million" with further contingent payments which will lead to the total purchase price of US$17 million.

"PING UK shall pay an initial cash consideration of US$5 million to the vendor after completion of the transaction and the balance sum of US$12 million shall be payable on a contingent basis on completion of key project milestones and via a production-linked payment.

"The purchase consideration will be funded by internally generated funds.

"Barring any unforeseen circumstances, the proposed acquisition is expected to be completed in the third quarter of 2021,” DNeX said.

According to DNeX, PING UK is a wholly-owned subsidiary of PING Petroleum Ltd, which in turn is a 90%-owned subsidiary of DNeX Energy Sdn Bhd, a wholly-owned subsidiary of DNeX.

At Bursa’s 12:30pm break today, DNeX’s share price slid 0.5 sen or 0.61% to 82 sen, valuing the group at about RM2.53 billion. DNeX has 3.09 billion issued shares.